Prime Minister Scott Morrison has just recently declared that the government’s Home Guarantee Scheme will have higher maximum property prices and more available places per year.
From July 1, this price upgrade will qualify houses in two out of five (40%) suburbs nationwide for the scheme. This is up from 24.1% according to analysis by CoreLogic.
For units it’s even better with over eight out of ten (81.2%) suburbs becoming eligible which is up from 65.4% under the current pricing scheme.
For those caught completely unaware, the Home Guarantee Scheme allows first home buyers to purchase a property with just a 5% deposit which allows buyers to avoid paying lenders mortgage insurance (LMI).
The price cap increases are here as The Adviser presented them:
NSW
Capital city and regional centres – $900,000 from $800,000 before
Rest of state – $750,000 from $600,000 before
Victoria
Capital city and regional centres – $800,000 from $700,000 before
Rest of state – $650,000 from $500,000 before
Queensland
Capital city and regional centres – $700,000 from $600,000 before
Rest of state – $550,000 from $450,000 before
WA
Capital city and regional centres – $600,000 from $500,000 before
Rest of state – $450,000 from $400,000 before
SA
Capital city and regional centres – $600,000 from $500,000 before
Rest of state – $450,000 from $350,000 before
Tasmania
Capital city and regional centres – $600,000 from $500,000 before
Rest of state – $450,000 from $400,000 before
ACT
Capital city and regional centres – $750,000 from $500,000 before
NT
Capital city and regional centres – $600,000 from $500,000 before
Jervis Bay Territory and Norfolk Island; and Christmas Island and Cocos (Keeling) Islands have seen no changes, with their respective caps remaining at $550,000 and $400,000
What this means for Sydneysiders, for example, is that one in six suburbs will have houses eligible for the Scheme. That is almost three times the number of houses eligible under the current price cap.
If you want a unit then you will have more options than ever before. If you want to purchase a unit in Adelaide, every suburb has a median unit price within the price cap. Same goes for Brisbane and Perth where nearly all suburbs fit within the threshold. It’s a large improvement for Sydney with six in ten suburbs eligible, and even better for Melbourne with eight in ten.
In case you were worried, raising the price caps is a good thing according to CoreLogic’s research director, Tim Lawless, as he told AFR, “Lifting the thresholds is a positive outcome for housing demand. The higher thresholds should help to support housing demand across the lower-priced detached housing markets as interest rates rise. Stronger demand from first home buyers and single-parent families could help to keep a floor under housing prices in suburbs where a larger portion of homes meet the price caps of the policy.”
